[Order]. - Indisputably, a notice had been served upon the respondent herein on 24-6-1997 under Section 11AC of the Central Excise Act, 1944 for alleged contravention of Rule 57GG and 4A of the Central Excise Rules, 1944.
2. The short question which arises for consideration before us is as to whether the said proceeding was maintainable in view of the fact that whereas the period of alleged contravention is said to be from 5-9-1995 to 7-9-1995, the provision of Section 11AC which was inserted in the Act by Act 33 of 1996 only with effect from 28-9-1996 and as such could not have been invoked.
Section 11AC reads as under :-
“11AC. Penalty for short-levy or non-levy of duty in certain cases. - Where any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded by reasons of fraud, collusion or any wilful mis-statement or suppression of facts, or contravention of any of the provisions of this Act or of the rules made thereunder with intent to evade payment of duty, the person who is liable to pay duty as determined under sub-section (2) of section 11A, shall also be liable to pay a penalty equal to the duty so determined :
Provided that where such duty as determined under sub-section (2) of section 11A, and the interest payable thereon under section 11AB, is paid within thirty days from the date of communication of the order of the Central Excise Officer determining such duty, the amount of penalty liable to be paid by such person under this section be twenty-five per cent of the duty so determined :
Provided further that the benefit of reduced penalty under the first proviso shall be available if the amount of penalty so determined has also been paid within the period of thirty days referred to in that proviso :
Provided also that where the duty determined to be payable is reduced or increased by the Commissioner (Appeals), the Appellate Tribunal or, as the case may be, the court, then, for the purposes of this section, the duty, as reduced or increased, as the case may be, shall be taken into account :
Provided also that in case where the duty determined to be payable is increased by the Commissioner (Appeals), the Appellate Tribunal or, as the case may be, the court, then, the benefit of reduced penalty under the first proviso shall be available, if the amount of duty so increased, the interest payable thereon and twenty-five per cent of the consequential increase of penalty have also been paid within thirty days of the communication of the order by which such increase in the duty takes effect.
Explanation. - For the removal of doubts, it is hereby declared that -
(1) the provisions of this section shall also apply to cases in which the order determining the duty under sub-section (2) of section 11A relates to notices issued prior to the date on which the Finance Act, 2000 receives the assent of the President;
(2) any amount paid to the credit of the Central Government prior to the date of communication of the order referred to in the first proviso or the fourth proviso shall be adjusted against the total amount due from such person.”
3. Section 11AC being a penal provision providing for a mandatory penalty, in our opinion, cannot be invoked in a case of this nature as the same would amount to give retrospective operation thereto which is impermissible in law. The view which we are taking find support from a Judgment of this Court in Commissioner of Central Excise, Coimbatore v. ELGI Equipments Ltd., - (S.C.).
4. For the aforementioned reasons, we are of the opinion that no case is made out for interference with the impugned judgment. The Special Leave Petition is accordingly dismissed.
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